Public Service Alliance of Canada BC

The factors that go into developing a pay demand

Our Union considers a number of factors when putting together a pay demand.

1. We examine what other workers are being paid who are doing comparable work and we make direct comparisons with PSAC members working for other federal employers.

We use union research, sometimes supplemented by compensation studies, to see what workers are being paid for comparable jobs both in the public and private sectors. With this data, we can propose what are known as “market adjustment” increases. These increases are designed to keep the federal government competitive as an employer. In an economy with low rates of unemployment and an aging workforce, that’s important. Our negotiating teams for each Treasury Board unit are determining what “market adjustment” increases are needed for their members. Look for more information on proposed adjustments in upcoming bulletins from the negotiating teams.

1. We calculate what we need to give our members some real economic improvement that reflects the continued strength of the Canadian economy and protects against inflation.
2. We consider what kinds of increases other workers are negotiating.

Our demand for 2007-2008-2009

For this round of negotiations, we’re proposing:

• an economic increase of 4.5%,
• in each year of a three-year collective agreement,
• retroactive to the first day of the new three-year agreement (the date in 2007 will vary by bargaining unit),
• that applies to all members covered by the agreement.

This proposal has already been tabled with Treasury Board for the PA and FB units and will be soon for the SV unit.

The reasons for 4.5%

Wage settlements are on the rise

Settlement patterns for major employers show that wage increases are on the rise. Private sector wage increases in 2008 are already at an average of 4.1%, that’s a full 1% above 2007. Settlements in the federal jurisdiction are up 0.5% since 2007. Compensation consultants are projecting wage increase growth in 2008 and increases averaging at least 3.6%. Our 4.5% starting point is a reflection of the upward trend of wage settlements.

Future recruitment is a challenge

Canada’s aging workforce is reflected in the federal public sector. According to the President of the Canada Public Service Agency, “more than half of all public servants are now over 45.” Retirements in the federal public sector are rising and are expected to do so for at least another five years. Treasury Board pay levels are going to have to be highly competitive to meet staffing needs and provide the necessary level of quality public services Canadians need and want.

Unemployment rates are expected to remain low

While any rate of unemployment is unacceptable, rates have been dropping steadily over the past five years to a rate of 6.0% in 2007. Economists are predicting that while rates may rise somewhat in 2008 and 2009, they project that the increases will be small. Low unemployment rates combined with high rates of retirement will mean fierce competition for available workers.

Inflation rates could be anyone’s guess

While economists predict that inflation will continue to be contained, there are some concerns that inflation may start to rise as a result of increases in fuel and food prices. In fact, the Consumer Price Index does not include energy and food prices in its calculations. So, official inflation statistics don’t necessarily reflect the real picture of rising costs our members face.

Putting our demands on the table

Negotiations for three of our Treasury Board bargaining units (FB, PA, SV) have reached the stage where it was time to put our demands for wage increases on the table.

Specific wage proposals for our TC and EB members are being developed and will be presented to Treasury Board in the months ahead. Some of them are being developed based on compensation studies that have either just been completed or are still in the process of being conducted.